ABS Building Approvals show that the number of dwellings approved fell by 7.8 per cent in February 2012 to reach their lowest level in nearly three years.
The national fall was largely due to activity in New South Wales, where dwelling approvals decreased for the month of February by 41.2 per cent.
Meanwhile, they rose in Queensland (13.0 per cent), South Australia (10.1 per cent), Tasmania (10.0 per cent), Western Australia (5.7 per cent) and Victoria (1.1 per cent) in seasonally adjusted terms.
In seasonally adjusted terms, approvals for private sector houses fell 3.4 per cent in February with falls in South Australia (-11.9 per cent), Western Australia (-8.4 per cent), New South Wales (-2.1 per cent), Queensland (-1.6 per cent) and Victoria (-0.6 per cent).
The value of total building approved decreased 32.1 per cent in February in seasonally adjusted terms, following an increase of 51.6 per cent in January. The value of residential building was flat while non-residential building fell 53.7 per cent.
The Housing Industry Association (HIA) Chief Economist, Dr Harley Dale said: “We have warned for some time of the risk that new home building activity will again plumb the depths experienced around the GFC. Building approvals are signalling that this outcome is unfolding in 2012.”
"Today's building approvals outcome is, quite frankly, woeful, even allowing for New South Wales virtually driving the entire fall. It is difficult to be positive about the short term prospects for new housing when a 7.8 per cent decline in building approvals in February 2012 takes them to their lowest level since March 2009. Furthermore, the level of approvals over the three months to February implies annual housing starts hitting a level lower than the GFC trough of 2008/09," said Dale.
"Current policy settings are failing the housing industry and therefore the wider Australian economy. The time for contemplation is over. Australia's interest rate settings are clearly too high and there needs to be immediate federal and state government focus on policy reform to boost flagging levels of new housing supply, a key driver of domestic economic activity and employment," Dale said.
"Today's building approvals update is heavily weighed down by a 41 per cent drop in New South Wales, just as the positive result for January was heavily boosted by a 36 per cent rise in NSW," said Dale.
"However, the trend in building approvals is flat to down in every state and territory with the exception of Queensland, which is recovering from an extremely low base."
Master Builders Australia Chief Economist Peter Jones said: “Last year’s interest rate cuts have failed to lift residential building and Master Builders believes further RBA action is now necessary to boost confidence and turn the ailing sector around.”
Jones said, “The current level of dwelling approvals is running at 130,000 (annualised), way below what’s needed to even provide for population growth let alone to begin to eat into the housing shortage estimated by the Government’s own Housing Supply Council at more than 200,000 dwellings.”
“Master Builders’ latest national survey for the March quarter reveals builder sentiment has turned even gloomier, with disappointing sales and weak display centre traffic and enquiries across residential and non-residential building.”
